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Top stock pitches (Thu, May 30)
Connor Van Ooyen
May 30, 2024
In partnership with
About // Sponsor YBR // Yellowbrick Website // Twitter
*This newsletter is for entertainment purposes only. Nothing in this newsletter is financial advice or recommendations.
👋 Good Morning!
Thanks for reading the Yellowbrick Road where I share the best stock pitches from fund letters, analyst reports, blogs, and more!
The three stock pitches you’ll read about in today’s email are:
SolarWinds Corporation ($SWI)
Author: Voss Capital | Price: $11.90 | Price Target: $23 (+93%) | Market Cap: $2.01B | Timeframe: N/A | Industry: Software - Infrastructure
Microsoft ($MSFT)
Author: @techfund1 | Price: $425.48 | Price Target: N/A | Market Cap: $3.20T | Timeframe: N/A | Industry: Software - Infrastructure
Achieve Life Sciences ($ACHV)
Author: Rogue Funds | Price: $5.30 | Price Target: $30 (+466%) | Market Cap: $185M | Timeframe: N/A | Industry: Biotechnology
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Feel free to share this email with any other investors that may like it.
Connor (follow the Yellowbrick Twitter account - @joinyellowbrick)
* If you missed yesterday’s email, don’t forget to read it here
YBR FEEDBACK
Here is some of the most common feedback I’ve received recently from Yellowbrick Road Readers and my responses to them. I may not respond to every survey result or email I get, but I do read them all!
Mention which stocks are pitched in the email at the top of the email
Done.
Make the ad a different color to stand out more
Done. Ads will now have a purple/pink dashed border.
Calculate the returns of all of the stock pitches mentioned in these free, daily emails
With almost 1,200 stock pitches sent since I started this email, the average returns for the YBR stock pitches beat the S&P 500 by quite a bit over every timeframe.
Of course, the stock pitches mentioned in these emails are not recommendations. This is meant to be a research tool to help you find interesting stocks that fit your investing style, but it’s nice to see they have performed well so far.
This also gives me high hopes for the YBR Premium Portfolio (upgrade for 20% off) which copies the trades of the top 10 investors in my database. If all of the stock pitches shared in these daily emails already beat the S&P, imagine how good the returns could be by just copying the trades of the very best investors!
I plan on making the spreadsheet with all of the nearly 1200 stock pitches available in the near future. I’ll likely make it a reward for readers who refer at least one other person to this newsletter (and will give it to all Premium subscribers).
Don’t include stock pitches from Twitter because there are a lot of scammers on there / you include too many small-cap companies that are more risky / you include too many stock pitches that I think are low-quality
While I am always trying to improve the quality of stock pitches in this newsletter, the quality of pitches is already quite good as shown by the returns above.
I have put a lot of time and effort into weeding out bad investors, scammers, low-quality pitches, etc. For example, nearly all of the pitches I share from Twitter are from professional investors or investors I have followed for a while and believe have pretty good returns.
Also, there are a lot of smaller companies included in these emails because a lot of smart people are pitching them!
You send way too many emails/stock pitches
I believe the Peter Lynch philosophy of: “Those who turn over the most rocks win”.
The only way to become a better investor and find better investment opportunities is to research a lot of stocks.
If you want to become a great investor, it will take a lot of work. So I don’t want to decrease the quantity of emails/stock pitches because that would just slow down the learning and opportunities for those who want to become better investors.
However, many people just want to copy the trades of top investors so they can make more money in the stock market without spending hours researching stocks.
That’s where the YBR Premium Portfolio comes in.
I’ve done all of the work to track 1,000s of investors, collect all of their pitches, calculate their returns, and find the best investors. I then put some money into a portfolio to copy the trades of the 10 best investors and alert Yellowbrick Premium members when they make a new trade.
If you just want to spend 30 seconds a day copying the trades of top investors, then upgrade to Yellowbrick Premium (link for 20% off).
Some of the stock pitches are old or the price has already gone up
The majority of stock pitches included in these free, daily emails are less than 10 days old. However, some sources (like Fund Letters and Value Investors Club) tend to be older due to when those stock pitches become public. For those older stock pitches, I only include them in the email if the stock price is still close to the price when it was pitched or if the price target from the author is still way above the current stock price.
Nearly all of the stock pitches shared in this email are medium to long-term stock pitches, so a delay of a few days/weeks doesn’t matter much (especially since I only include pitches where the stock price hasn’t moved yet or there is still a ton of upside).
However, there are still times when a stock pops before I can share it in the free, morning emails.
This actually just happened yesterday. I added $TELL to my database on Tuesday and shared it with YBR Premium Subscribers (they get an extra daily email with every stock pitch that gets added to my database as soon as they are added) and then the very next day (yesterday) it popped 20% after it announced it was being acquired (shoutout @ACapitalLP for the pitch).
I would’ve shared this $TELL pitch in the free, morning email in the next few days, but obviously won’t now. Fortunately, there are plenty of other great stock pitches to share!
Lastly, I’d again point to the average returns of the YBR stock pitches to prove that the stock pitches aren’t too old and the price hasn’t gone up too much before I share them.
$TELL pitch from premium email
YBR PORTFOLIO
The YBR Portfolio copies the trades of the top 10 investors (based on the average returns of their previous stock pitches) in our database of 1,000+ investors. If you want to be alerted when the best investors buy/sell a stock, then this section is for you.
*All investments in the YBR Portfolio will be for ~3% of the portfolio value (which allows us to hold a maximum of 33 stocks at a time).
New Trade Alert!
We just made a new investment in the YBR Portfolio and copied a trade from the #7 investor in our database who averages 42%+ 2-year returns on their stock pitches.
The new stock is…
The YBR Portfolio is only available to Premium Subscribers. If you want to know which stocks the top investors are investing in, upgrade to Yellowbrick Premium (you get a 20% discount using that link or the button below).
STOCK PITCHES
Author Returns
The below stock pitch is from Voss Capital.
We have 61 stock pitches from them in our database and their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
FUND LETTER - Voss Capital
Voss Capital Value Fund Portfolio Holding: SolarWinds Corporation
SolarWinds Corporation provides information technology (IT) management software products in the United States and internationally.
Ticker: SWI | Price: $11.90 | Price Target: $23 (+93%)
Market Cap: $2.01B | Timeframe: N/A
💻 IT Management Software Tech | 📈 Bullish Idea
SolarWinds (SWI), an observability software firm transitioning to a subscription model, trades at just 9x FCF despite 50% EBITDA margins, 90% gross margins, and accelerating ARR growth above 7%, making it the cheapest $1B+ software stock. The company has consistently beaten expectations and seen significant positive revisions, with 2024 EBITDA estimates rising from $317 million to $375 million over the past year, despite a public cyber-attack three years ago that is no longer an issue for customers. With a price target of $23 for 92% upside at 14x FCF, a 50%+ discount to inferior comps, and two large private equity holders, there is a high likelihood of a PE buyout within the next year.
Read the full article here. Read time: 2 min
Author Returns
The below stock pitch is from @techfund1 on Twitter.
We have 8 stock pitches from them in our database and their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
TWITTER - @techfund1
Microsoft's Azure AI Ecosystem: Booming with Customer Successes
Microsoft Corporation develops and supports software, services, devices and solutions worldwide.
Ticker: MSFT | Price: $425.48 | Price Target: N/A
Market Cap: $3.20T | Timeframe: N/A
🤖 AI | ☁️ Cloud Data Services | 📈 Bullish Idea
Microsoft is experiencing surging demand for its Azure AI services, with customers transitioning from pilot phases to full-scale deployments, as evidenced by Real Madrid's 400% increase in fan profiles and 30% revenue growth, and Volvo saving 850 manual hours per month. The company's AI ecosystem is expanding, with 53,000 active Azure AI customers, one-third of which are new to Azure, and an 80% year-over-year growth in $100 million-plus contracts, demonstrating strong customer commitment and the ability to attract new customers to the Microsoft platform.
Read the full article here. Read time: 1 min
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Author Returns
The below stock pitch is from Rogue Funds.
We have 8 stock pitches from them in our database and their historic returns are:
Upgrade to Yellowbrick Road Premium to unlock the historic returns for this author. Upgrade for 20% off.
FUND LETTER - Rogue Funds
Achieve Life Sciences: Nicotine Cessation Drug with Short-Term Multi-Bagger Potential
Achieve Life Sciences, Inc., a clinical-stage pharmaceutical company, develops and commercializes cytisinicline for smoking cessation and nicotine addiction. The company offers cytisinicline, a plant-based alkaloid that interacts with nicotine receptors in the brain that reduce the severity of nicotine withdrawal symptoms
Ticker: ACHV | Price: $5.30 | Price Target: $30 (+466%)
Market Cap: $185M | Timeframe: N/A
🧪 Pharmaceuticals | 🚬 Smoking Cessation | 📈 Bullish Idea
Achieve Life Sciences (ACHV) presents a compelling investment opportunity with its best-in-class smoking cessation drug, Cytisinicline, which has demonstrated superior efficacy and safety compared to the leading drug, Chantix, in two successful Phase 3 trials. The company is pursuing an NDA in the first half of 2025 after completing a long-term safety study, with Cytisinicline showing 3-6 times more effectiveness than Chantix and fewer side effects, particularly less nausea. With peak sales potential of $300M-$600M in the US alone, a market capitalization of $1B-$1.8B at a conservative 3x sales multiple is achievable, and the company's IP is protected until 2040. Despite recent dilution and a surprise FDA request for a safety study, Achieve has secured sufficient funding through the NDA process with $64M in cash and $60M in potential warrant proceeds. The addition of investment bankers to the Board of Directors signals a likely buyout ahead of the NDA filing, with a price target range of $12-$25 per share, representing a 135-385% upside from current levels.
Read the full article here. Read time: 5 min
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results:
🟩🟩🟩⬜️⬜️ MercadoLibre ($MELI) [41%]
🟨🟨⬜️⬜️⬜️ Valaris ($VAL) [30%]
🟥⬜️⬜️⬜️⬜️ BRP Inc ($DOOO) [29%]
Your comments:
🚤 burkh*** ($DOOO): Of the 3, DOOO is the only manufacturer, and the only one trading below its 52-week avg. I also know its products and it's a player in its industry. I'm buying this stock today
🚤 nanr*** ($DOOO): BRP looks really good to me, the best of these 3. I am going to research it further.
MARKET OVERVIEW / NEWS
Market Overview
Which stock idea was the most compelling to you? |
Yesterday’s Poll Results: 51% bullish
A bit rougher of a day in the market yesterday with all of the indexes down quite a bit (even though a few retailers like Abercrombie and Chewy had killer earnings). All of our sentiment markers also fell: Yellowbrick Road Readers fell from above 60% bullish to just barely over 50%, The Fear v Greed index fell below 50, and the News sentiment dropped below 0. The S&P also fell below its 8-day EMA, which could signify the upward momentum is cooling.
Stock Market News
ConocoPhillips in advanced talks to buy Marathon Oil, FT reports - Reuters
Abercrombie & Fitch posts its strongest first quarter ever, as sales jump 22% - CNBC
Dick's Sporting Goods raises guidance, says shoppers are spending more on sneakers and athletic gear - CNBC
American Eagle profit soars, but stock sinks as sales grow slower than expected - CNBC
J&J's treatment for depression succeeds in late stage study - Reuters
BlackRock's ETF becomes largest bitcoin fund in world, Bloomberg News reports - Reuters
Salesforce stock tanks as second-quarter revenue forecasts below estimates - Reuters
FEATURED INSIDER TRADE
The insider trade is brought to you by CEO Watcher (another free, weekly email I write). It’s the only newsletter that tracks insider returns to find the best ones. Subscribe here
President and CEO at OmniAb, Inc. ($OABI)
The President and CEO purchased 240,000 shares at $4.42/share ($1.06M total) which increased their vested holdings by 7.3%. The current price is $4.17 (-5.6%). Their median purchase size is $114K and this is their 3rd largest purchase out of 23 all time. (trade link)
Historic Returns
1m returns: 11% weighted | -1% median | 50% win rate (11/22)
3m returns: 22% weighted | 12% median | 67% win rate (14/21)
6m returns: 17% weighted | 5% median | 60% win rate (12/20)
1y returns: 51% weighted | 37% median | 65% win rate (11/17)
LINKS YOU’LL LOVE
THAT’S ALL FOLKS
Thank you so much for reading today’s email! Your support is the only way I can write this email for free every day.
Give me feedback in the poll below and share the newsletter with other investors if you find it useful!
Connor
*Follow Yellowbrick on Twitter at @joinyellowbrick
How would you rate today's newsletter?If you vote 1 or 3 stars, please leave a comment with what you didn't like so I can improve it! |
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